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Parliamentary Control Over Public Finance In India

On August 28, 2013 By Vijay Jaiswal Category: Indian Constitution, Parliament of India

Parliamentary Control Over Public Finance In India

The Indian constitution has built up elaborate institutional devices for the purpose of Parliamentary control over Public Finance in India. Financial activities of the government fall into two types–collection of revenue and expenditure of funds raised through revenue. Both types of activities are regulated by constitutional provisions.

Article 265 forbid any imposition of tax or collection of revenue except by the authority of law. Revenue collected without the authority of law is forcible exaction, for which subjects may seek relief in law courts. All revenues received or loans raised by the government are deposited in the “Consolidated Fund of India.” There is also a “Contingency Fund of India” created in 1950. This fund unable the executive to make advances without Parliamentary approval to meet unforeseen expenditures. The President is the custodian of these funds.

In terms of Article 66, no money can be appropriated from the consolidated fund without the authority of law. It means that Parliamentary sanction is necessary for every expenditure made by the executive.

The constitution provides elaborate machinery to ensure that government expenditures are confined within the limits of Appropriation Acts. Three institutions (a) the Auditor and Comptroller General, the Public Accounts Committee or the P.A.C. and the Estimates Committee, are relevant in this regard.

The Auditor and Comptroller General is the guardian of the public purse. He is not directly under the control of the Government. He can be removed from office only by an address of both Houses of Parliament for proved misbehavior or incapacity. His function is to ensure that government expenditures are incurred in accordance with Parliamentary sanctions. He submits his report on the accounts of the union government to the President who has to lay it before each House of the Parliament.

The P.A.C. or the Public Accounts Committee is another institution through which the Parliament controls government’s financial operations. The committee consisting of 22 members, 15 from the House of People and 7 from the Council of states, and presided over by a member of the opposition, considers and examines the report of the Auditor and Comptroller General. The committee brings to the notice of the Parliament instances of irregular or in fructuous expenditures by the ministries.

Finally the Estimates Committee scrutinizes the estimates of expenditure submitted to the Lok Sabha. The P.A.C. scrutinizes expenditures after they are incurred while the Estimates Committee scrutinizes the proposed expenditures of the government. Thus the two committees are complementary to each other. Taken together, the two, keep close watch over the entire process of expenditures. This committee came into existence in 1952, consists of 30 members, all members of the Lok Sabha. This is quite appropriate because money bills can originate only in the Lok Sabha and it has complete control over money bills.

Because of this elaborate arrangement for the Parliamentary control over national finances, it may appear that the finances of the union government are under the rigid control of the Parliament. But the real picture is very different. The Parliament is firmly under the control of the Prime Minister and the cabinet due to their majority support in the House of People. The Cabinet controls the Parliament and through it, the finances of the union government. Whatever little control the Parliament exercises is through the criticism of the opposition. The opposition exposes and brings to the attention of the nation. Instances of financial misbehavior of the government. But unlike the British opposition, the Indian opposition is divided and hence weak. So even this check is not as strong as it should be.

 

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  2. Two Houses Of Parliament In India – Composition And Functions
  3. Committee System in Indian Parliament
  4. Public Finance in India
  5. Parliamentary Committee in India
  6. Public Accounts Committee in India – Composition, Function, Importance
  7. Sources of Industrial Finance in India
  8. Composition of Finance Commission in India
  9. Public Sector and Nationalization of Industries in India

Category: Indian Constitution, Parliament of India Tagged With: Indian Parliament




Related Posts

  1. Role And Functions Of Comptroller And Auditor General Of India (CAG)
  2. Two Houses Of Parliament In India – Composition And Functions
  3. Committee System in Indian Parliament
  4. Public Finance in India
  5. Parliamentary Committee in India
  6. Public Accounts Committee in India – Composition, Function, Importance
  7. Sources of Industrial Finance in India
  8. Composition of Finance Commission in India
  9. Public Sector and Nationalization of Industries in India

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